Asian Stocks See Muted Start; Treasuries Steady: Markets Wrap

Asian stocks saw a muted start to trading Friday after a lackluster U.S. session as investors mulled the stalemate in stimulus negotiations and parsed signs of an economic recovery. Treasury yields steadied near an eight-week high.

Stocks slipped in Japan and South Korea, and ticked higher in Australia. S&P 500 futures ticked higher, following a dip in the benchmark a day after it surpassed an all-time closing high, with energy, real estate and industrial sectors leading the drop. The Nasdaq Composite Index closed in positive territory. Trading volume was about 20% below the 30-day average. Gold resumed its advance. The dollar was steady.

Elsewhere, oil pared losses as investors assessed the International Energy Agency’s reduced forecasts for global oil demand in part due to a slowdown in air travel.

Investors continue to bank on further fiscal stimulus to help the nascent recovery, after stock markets in the U.S. and Asia erased most of their pandemic-related losses. A report showed weekly jobless claims in the U.S. dropped below 1 million for the first time since March, but there are more Americans seeking work now than at the highest point after the 2008 financial crisis.

“Investors assumed that a deal would get done in early August. Now that this is not happening, it raises some risks for the economy,” said Matt Maley, chief market strategist at Miller Tabak & Co. “Therefore, investors are going back to focusing on what will work even if the economy sputters once again.”

Meanwhile, Florida’s governor warned that more Covid-19 virus deaths may be coming at nursing homes and assisted-living facilities. Germany recorded the highest number of new cases in more than three months, as cases also rose in France, Greece and Spain.

Here are some key events coming up:

  • China releases a slew of data for July on Friday, including industrial production and retail sales.
  • U.S.-China trade talks are expectedin coming days.

These are the market movers:

Stocks

  • S&P 500 futures rose 0.3% as of 9:05 a.m. in Tokyo. The S&P 500 fell 0.2% Thursday.
  • Japan’s Topix Index fell 0.2%.
  • Kospi Index fell 0.7%.
  • Australia’s S&P/ASX 200 futures rose 0.1%.

Currencies

  • The yen fell 0.1% to 107.02 per dollar.
  • The offshore yuan traded flat at 6.9487 per dollar.
  • The Bloomberg Dollar Spot Index was little changed.
  • The euro bought $1.1812, little changed.

Bonds

  • The yield on 10-year Treasuries fell one basis point to 0.71% Thursday.

Commodities

  • West Texas Intermediate crude rose 0.3% to $42.37 a barrel.
  • Gold was at $1,957 an ounce, up 0.2%.

— With assistance by Ishika Mookerjee

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